Ruminations on law and life

Who’s making money from MCLE?

Years ago in California, an adjunct law professor I met recalled a story he swore was true. He’d been to a house party where it seemed every other person he met there was a lawyer.

By the time, he’d met a woman who was herself, a lawyer, and who had then introduced her son and daughter-in-law standing next to her, as lawyers, he cracked, “It was time to go. There was a dog in the house and I was afraid that my next introduction would be to the dog and that he’d be a lawyer, too.”

The story is likely apocryphal. But with about a quarter million lawyers, California is the largest state bar association in the United States and barking lawyers aside, it’s doubtful Fido has yet to get a bar license. But as of the February 2010 bar exam pass rate, the number of active lawyers in California exceeds 228,000.

Making money from MCLE.

I thought of this ‘tail’ this week because I was asked whether or not I knew the economic size of the mandatory continuing legal education market or what it costs lawyers each year to satisfy MCLE. It’s a good question. I wish I knew. Like metastizing lawyers, there’s a glut of CLE purveyors.

Moreover, there doesn’t appear to be a central clearinghouse for such market information, although I suspect it’s available like anything else, for a price. There’s likely an industry interest group, marketing association, or business consultancy only too happy to pitch you on how you too, can tap into the “booming” CLE provider business.

Economics.

It’s well established, though, that continuing legal education is a worthwhile revenue source to a state bar’s bottom line. It’s usually just behind membership fees in percentage of contribution to bar revenues.

Look no further, for instance, than a 2009 Utah State Bar Operations Review Continuing Legal Education and the following paragraph: “In addition to live CLE, the Bar maintains an on-line library of CLE. Attorneys can watch these presentations on computer or download them to an MP3 player. The attorney purchases the CLE for approximately $31.50/credit hour and is e-mailed a password to access it. . .The Bar pays $1.50 of each credit hour to MCLE. This CLE comes from various Bars around the country and other CLE providers in addition to Bar programs. Some states charge as much as $120/credit hour for these programs.”

And finally, the same report makes the following recommendation: “The Bar should raise prices of CLE given the prices charged by national and private CLE providers. Other private CLE providers charge significantly more money for CLE presentations. If the Bar provides high quality CLE, it should be able to charge more than it currently charges.”

Challenges to state bar market dominance.

In the United States, depending on which online resource you tap into, it’s either 40, 42 or 47 states and territories that require lawyers to take continuing legal education classes to keep their licenses to practice law. One resource, which is likely more credible than others is the ABA’s list of Mandatory CLE State Requirements. Nebraska, Hawaii, Alaska and New Jersey are comparatively recent additions to the mandatory continuing legal education hit parade.

But challenges have emerged to the dominant position state bars have long enjoyed in dictating how and where members satisfy their requirements. Bars, however, do remain firmly in control as CLE-provider gatekeepers of who can qualify as providers and how much they have to pay for the distinction.

I can surmise such decreases may be attributable to a number of factors, not the least being the economy. But more likely it’s the growth of every competing ‘Tom, Dick and Harry’ private CLE providers who have entered the business and wrested away revenues from state bars. Nevertheless, the slew of competing providers, both large and small, suggest that the CLE market remains viable, sizable and still lucrative.

MCLE outliers.

Still, outliers remain. Connecticut and Maryland may still be the only jurisdictions not yet arm-twisting their bar members to take continuing legal education courses.

And Connecticut lawyer David Schaefer, for one, may be the last lonely salmon gasping his way upstream in what’s likely a losing battle to keep his jurisdiction an MCLE-free zone. His “ARGUMENTS IN OPPOSITION TO MANDATORY CLE” make compelling reading.

Conversely, Maryland Judge Lynne A. Battaglia and lawyer Paul Mark Sandler make the opposite argument. Unfortunately, they’re the same warmed-over ones all the other state bars have used to persuade their state supreme courts to mandate MCLE in their jurisdictions. Judge Battaglia and Mr. Sandler’s unpersuasive contentions can be read at “Why Maryland Needs Mandatory CLE“.

However, with all due respect, I did find one of the Marylanders’ enumerated ‘straw man’ arguments against MCLE especially laughable. Here’s their straw man set-up, “There is no evidence that MCLE improves the quality of attorney performance.”

To which they reply, “The short answer is that there is no evidence that MCLE does not improve lawyer competence. Common sense dictates that professionals who participate in CLE will learn and direct their learning to develop their character and expertise as lawyers.”

I thank the late Fr Michael J Kristovich SJ for teaching me logic a long time ago. The preceding argument is one of the better instances of trying to prove a negative. Just because a premise cannot be proven false, that is, that “there is no evidence that MCLE does not improve lawyer competence,” then the opposite must be fallaciously true. MCLE should be adopted in Maryland to improve lawyer competence. Thanks for the chuckles.

Who knows?

But who really knows how much money is being made by mandating continuing legal education? In Arizona, for instance, assuming for the sake of ‘back-of-the-envelope’ round numbers that an average CLE hour costs $50 and members are required to take a minimum 15 hours per year, that’s $750 per year multiplied by say, 13,000 plus members and you have an approximate market worth $1,000,000.

Granted CLE prices vary. They can run much higher and also much lower. Some jurisdictions have also had to reduce their prices in the face of competitive pressures from local bar associations and online providers.

And some lawyers for one reason or another annually exceed the minimum requirement, especially for example, those with certified specialist credentials. And if you shop around, you can reduce your CLE costs further, such as by locking in an annual fixed rate for considerably less than $750.

There’s also CLE reciprocity if you’re licensed in more than one jurisdiction. And counter-intuitively, the Arizona Bar exempts lawyers from CLE when they turn 70. So clearly, from the Arizona Bar’s own fiscal report, their CLE revenues don’t even come close to my guesstimated market projection.

Mooing for moolah.

But regardless of the actual size of the market, the reason I keep blogging about “Free CLE” is not just because I’m contrarian by nature. But it’s because I take offense at the endemic thinking found at some bar associations.

[…] reason some if not all bar associations continue mandating continuing legal education is to ensure cash cow money-making revenue. And oh yes, there is that pretextual public relations reason to protect consumers from incompetent […]

[…] So far, there’s no end in sight for lawyers seeking free online access to creditworthy continuing legal education — or who are otherwise intent on depriving their respective state bars from removing additional pounds of flesh from the lawyer corpu… […]